Price action: Traders opted to remove risk ahead of Friday morning's USDA Supply & Demand Report and the end result was sharp daily losses of 20-plus cents in the March and May contracts. July corn ended 14 1/4 cents lower, while new-crop corn closed around 7 to 8 cents lower.
Fundamental analysis: Futures were slightly lower at the start of open-outcry trade on light profit-taking following yesterday's gains. A firmer U.S. dollar index also encouraged light profit-taking. But selling picked up ahead of midday, with nearbys leading losses amid bull spread unwinding.
New-crop futures saw lighter losses, but still did some technical chart damage and were pressured by recent soil moisture improvements across the Corn Belt, which raises expectations for a recovery in production this year.
Technical analysis: May corn futures posted a downside day of trade on the daily chart, making bears' next target the February low of $6.80 3/4. Meanwhile, December corn futures posted a new-for-the-move low. The contract has posted its first close below the 75% retracement mark of the rally from the June low to the September high, which stands around $5.49. Followthrough pressure tomorrow would have bears targeting the June low of $5.11.
Hedgers: 100% sold on 2012-crop in the cash market -- 10% for March 2013 delivery. No 2013-crop sales recommended yet.
Cash-only marketers: 75% sold on 2012-crop --10% for March 2013 delivery; 15% for May 2013 delivery. No 2013-crop sales recommended yet.
Price action: Soybean futures saw a very volatile day of trade. March soybeans ended 12 cents lower, the May contract was 1/2 cent lower and deferred contracts were 1/2 to 3 cents higher. Soymeal posted slight losses for the day while soyoil posted slight gains.
Fundamental analysis: Traders oscillated between profit-taking and short-covering today amid mixed fundamental factors. On one hand, shipping delays in Brazil mean export demand for soybeans has remained strong longer than anticipated. Ongoing export demand strength is expected to result in USDA lowering its U.S. carryover projection by 3 MMT Friday to a razor-thin 122 million bushels. Strengthening basis levels around the country this week are indicative of the bullish supply/demand situation.
On the other hand, the market knows South American supplies will eventually hit the market and slow demand for U.S. soybeans/products. Plus, recent Midwest moisture with more precip in the forecast reduces drought concerns.
Technical analysis: Support for May soybean futures is at last week's low of $14.20 1/2 and resistance is at yesterday's high of $14.81 3/4, followed by the 2013 high of $14.97.
Hedgers: 100% sold on 2012-crop in the cash market. No futures/options positions at this time. No 2013-crop sales advised yet.
Cash-only marketers: 75% sold on 2012-crop production for harvest delivery. No 2013-crop sales advised yet.
Price action: Wheat futures ended low-range with losses of 19 to 22 1/4 cents in Chicago, mostly 17 to 20 cents in Kansas City and mostly 12 to 18 cents in Minneapolis.
Fundamental analysis: Selling pressure in the wheat market built through the day amid pressure from the weather and a firmer dollar. With recent heavy snowfall melting across the Central and Southern Plains and rains on the way this weekend, traders have forgotten about drought conditions in the region. In addition to the benefit from the recent heavy moisture, there's hope the weather pattern may be changing.
What the wheat market needs to stop the bleeding is fresh demand news. Unfortunately, a firming dollar is wiping out some of the price drop. The lack of strong export demand is signaling wheat prices haven't fallen far enough.
Technical analysis: July Chicago wheat futures closed below $7.00 for the first time since June 15 of last year. That day's low of $6.85 3/4 is initial support, followed by the May low at $6.70 and then the November 2011 low at $6.63. Contract-low support is at $6.47 1/2.
Hedgers: 75% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 75% of 2012-crop is sold. No 2013-crop sales advised yet.
Price action: Cotton futures finished 26 to 76 points higher in all but the October contract, which was 1 point lower today.
Fundamental analysis: Cotton futures stood tall in the face of relatively broad-based commodity selling that was encouraged in part by strength in the U.S. dollar index today. With traders expecting USDA to trim its 2012-13 cotton carryover projection Friday, selling interest remains limited.
The expected cut in cotton carryover is likely to come amid a larger export forecast as demand for U.S. cotton has stayed strong despite the price rise and a firming dollar. Traders will get another gauge of export demand tomorrow via the Weekly Export Sales Report -- assuming the winter storm doesn't shut down government offices again tomorrow.
Technical analysis: Key near-term resistance for May cotton futures stands at the old consolidation range from 87.52 cents to 91.60 cents. The contract entered that range today, but was not able to find fresh buying at that level and closed below the bottom of the range.
Hedgers: 50% priced on expected 2012-crop production in the cash market.
Cash-only marketers: 50% priced on expected 2012-crop production in the cash market.